The SEC has uncovered and brought to an end a Ponzi
scheme involving the sale of $12 million of Elva Group securities. The SEC action, however, will not provide any
relief to the victims who already lost their money to this fraudulent
investment, and investors should investigate whether other persons or financial
institutions participated in selling the securities.
The agency has charged Armand
Franquelin and Martin Pool with violating federal securities laws by acting as
unregistered broker-dealers in convincing investors to use IRA funds to invest
in the Elva Group, which they represented would develop real estate and
guaranteed returns up to 240% per year. According to the SEC, Franquelin and Pool used
the money for their own personal use and to make “interest” payments to early
investors in the Elva Group. The scheme
lasted from January 2006 through August 2010 and successfully lured
approximately 130 investors to invest millions of dollars.
Pool has
consented to entry of a final judgment against him, and is permanently enjoined
from future violations of the federal securities laws. He has also agreed to the assessment of more
than $1.3 million in fines and interest.
These sums, however, will provide no relief to his victims because the
SEC has waived these payments due to Pool’s current financial condition. Accordingly, while the Ponzi scheme will no
longer put investors at risk, those who have already been defrauded are left
without any restitution of their losses.
